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Tuesday, December 22, 2015

LIC Bonus Rates for 2015 - 2016

 

LIC has revealed the bonus rates for the year 2015-16 for all of its traditional plans. Since return from LIC Policy is majorly depending on the bonus declared, it becomes utmost necessary to know these rates.

But before knowing the bonus rates let us first understand the kinds of bonus declared by LIC and how the bonus is calculated based on these bonus rates.

Types of LIC Bonusand Additions

There are four types of bonuses declared by LIC. These are:

Simple Reversionary Bonus

What we simply meant when we say Bonus is this "Simple Reversionary Bonuses". This bonus is declared per thousand of the Sum Assured Amount in each financial year by LIC but will be paid at the end of maturity period or on the death of the policyholder, whichever is earlier. For instance if you are holding Jeevan Lakshya Policy with Sum Assure amount of Rs.10 lakhs and policy term exceeding 20 years and the bonus declared this year is Rs.49, then your bonus amount would be Rs.49,000 for current year, but as said earlier, you will get this amount only at maturity or on death.

 One important point to note is that in case you surrender the policy then you will not only get proportionate amount that too if you have paid 5 years of premium in full.
 

Final Additional Bonus (FAB) or Terminal Bonus

This is the second type of bonus declared by LIC termed as Final Additional Bonus (FAB). FAB is a onetime payment and paid only to those policyholders who have policy of longer duration, say 15 years and more, and has paid premium for all 15 years. Usually, policies having Guaranteed Additions are not eligible for FAB. Given below is indicative list Final Additional Bonus.

Final Addition Bonus FAB List

Loyalty Additions

Loyalty Addition is a non-guaranteed bonus which is given as an appreciation of being a long-term loyal customer of LIC. Usually this is also declared per thousand of sum depending and at the end of the policy term but for some policies it gets declared after completion of certain policy period such as in Jeevan Saral Policy, loyalty additions will be awarded to the policyholders after completing minimum of 10 years. But likewise FAB, loyal addition is also paid at the end of maturity period or on death whichever is earlier subject to completion of minimum policy period.

 

Guaranteed Additions (GA)

Some of the LIC Policies offers a "Guaranteed Additions" which means that policyholder will get an assured amount of sum for a specified period. For instance, Jeeva Shree-1 policy provides a Guaranteed Additions of Rs.50 per year per thousand sum assured for first five years of the policy. Another such policy is Komal Jeevan. Guaranteed Additions are added with the Basic Sum Assured and paid at the time of claim.

LIC Simple Reversionary Bonus Rates for 2015-16

LIC Bonus Rates for 2015-16

I have highlighted the increase of Bonus Rates from past year but no major revisions can be seen in Bonus Rates.

LIC Final Additional Bonus (FAB) Rates for 2015-16

Will Update Soon

LIC Loyalty Additions for 2015-16

Will Update Soon

LIC Bonus Calculation Formula

Formula of Calculating Bonus amount according to the bonus rate is pretty easy. Since bonus are declare per thousand basis, you have to divide your sum assured amount by thousand and then multiply it by given bonus rate for the year.

Bonus Amount = Bonus Rate X Sum Assured/1000

For instance, Bonus declared for New Children's Money Back Plan (832) is Rs.48 for current year, so policyholder having Rs.10 lakhs sum assured and policy term exceeding 20 years would get Rs.48,000 (Rs.48 X 10,00,000/1,000) as bonus which will be paid at the time of making claim.

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